Medical Expense Deductions 2026: What Qualifies & How to Claim

The 7.5% AGI Threshold: How It Works

Medical expenses are deductible only to the extent they exceed 7.5% of your Adjusted Gross Income (AGI). Your AGI is found on Line 11 of Form 1040. This threshold was permanently set at 7.5% by the Tax Cuts and Jobs Act, making it more favorable than the 10% threshold that briefly applied to some filers in prior years.

The calculation is straightforward: take your total qualifying medical expenses, subtract 7.5% of your AGI, and the remainder — if positive — is your deductible amount. Everything below that floor is invisible to the IRS for deduction purposes.

Formula: (Total medical expenses) − (AGI × 7.5%) = Deductible amount

There are two key strategies to maximize this deduction. First, bunch medical expenses into a single calendar year. If you have elective procedures you can time — dental work, LASIK, physical therapy — concentrating them into one tax year gives you a larger pool of expenses to clear the threshold. Second, time elective procedures strategically. If you know you'll hit the threshold in one year due to a surgery or chronic condition, schedule optional work in that same year rather than splitting it across two years where neither year's expenses might clear the floor individually.

Complete List of Deductible Medical Expenses

The IRS defines a qualifying medical expense as one that "diagnoses, cures, mitigates, treats, or prevents disease, or for the purpose of affecting any structure or function of the body" (IRS Publication 502). The list is far broader than most people assume. Only expenses paid out-of-pocket count — amounts reimbursed by insurance or an HSA are excluded.

Doctors, Hospitals, and Procedures

• Doctor visits: primary care, specialists, urgent care co-pays
• Hospital stays, surgical procedures, emergency room care
• Anesthesiologist and surgeon fees not covered by insurance
• Prescription medications (not over-the-counter, unless prescribed by a doctor)
• Insulin — deductible even without a prescription

Dental and Vision

• Dental exams, cleanings, X-rays
• Fillings, crowns, root canals, extractions
• Braces and orthodontia
• Dentures and bridges
• Eye exams and contact lens exams
• Prescription eyeglasses and contact lenses
• LASIK and other vision-correction surgery

Mental Health and Behavioral Health

• Psychotherapy and talk therapy session fees and co-pays
• Psychiatry appointments and psychiatric medications
• Substance abuse treatment and rehabilitation programs
• Inpatient mental health facility stays

Therapy and Rehabilitation

• Physical therapy prescribed by a physician
• Occupational therapy
• Speech therapy
• Chiropractic care
• Osteopathic treatment
• Acupuncture (IRS has explicitly allowed this since 2006)

Medical Equipment and Supplies

• CPAP machines and supplies for sleep apnea
• Hearing aids and batteries
• Blood glucose monitors and test strips for diabetes
• Wheelchairs, crutches, walkers
• Prosthetic limbs and artificial eyes
• Oxygen equipment and tanks

Home Modifications for Disability

• Wheelchair ramps — deductible to the extent they do not increase property value
• Grab bars in bathrooms
• Widened doorways for wheelchair access
• Stair lifts (elevator for medical necessity)
• Lowered kitchen cabinets or countertops for wheelchair users

Fertility Treatments

• IVF (in vitro fertilization) cycles
• Egg freezing (oocyte cryopreservation)
• Sperm banking
• Fertility drugs and hormones
• Embryo storage fees

Weight Loss and Smoking Cessation

• Weight-loss programs prescribed by a doctor to treat a specific disease (obesity, hypertension, heart disease)
• Smoking cessation programs
• Prescription nicotine patches and medications (Chantix, Zyban)

Long-Term Care Insurance Premiums

• Premiums for qualified long-term care insurance contracts — deductible up to age-based limits (see section below)

Transportation for Medical Care

• Medical mileage: 21 cents per mile for 2026
• Taxi, Uber, bus, train fares to and from medical appointments
• Parking fees at hospitals and clinics
• Tolls when driving to medical care

Medical Expenses That Are NOT Deductible

The IRS draws sharp lines around what qualifies. These commonly claimed items are specifically excluded under IRS Publication 502:

• Over-the-counter medications — aspirin, antacids, cold medicine, allergy pills — are not deductible unless specifically prescribed by a physician for a diagnosed condition
• Gym memberships — the IRS does not allow these even if a doctor recommends exercise; a specific prescription for a diagnosed disease (like obesity treated through a structured weight-loss program) is required
• Cosmetic surgery — nose jobs, facelifts, and purely elective procedures do not qualify; reconstructive surgery following an accident, trauma, or disease (mastectomy, cleft palate repair) does qualify
• Teeth whitening — purely cosmetic; not deductible even with a dentist's involvement
• Vitamins and supplements — not deductible unless prescribed for a specific diagnosed condition; general wellness supplements never qualify
• Funeral and burial expenses — explicitly excluded by the IRS
• Health insurance premiums paid through employer pre-tax — these are already excluded from your taxable income; you cannot double-dip
• Expenses reimbursed by insurance or HSA — only unreimbursed amounts count

Real Scenario: Robert and Lisa's Medical Expense Year

Understanding the calculation in the abstract is one thing. Seeing it applied to a real household makes the strategy concrete. Robert and Lisa file jointly with a combined AGI of $95,000. Here is their medical expense picture for the year:

7.5% threshold: $95,000 × 7.5% = $7,125

Deductible medical expenses: $32,598 − $7,125 = $25,473

Now the question is whether itemizing beats the $32,200 standard deduction for MFJ. Adding other itemized deductions:

• Medical deduction: $25,473
• Mortgage interest (Form 1098): $12,000
• State income tax + property tax (SALT, capped): $10,000
• Total itemized: $47,473

Robert and Lisa's total itemized deductions of $47,473 exceed the $32,200 MFJ standard deduction by $15,273. At the 22% marginal bracket, this additional deduction translates to approximately $3,360 in tax savings. Lisa's hip surgery alone made itemizing overwhelmingly worthwhile.

HSA: The Triple Tax Advantage

If you have access to a Health Savings Account through a High Deductible Health Plan (HDHP), maximizing your HSA contribution is one of the most powerful moves in the US tax code. The HSA is the only account with a genuine triple tax advantage.

The three tax benefits are: (1) Contributions go in pre-tax, reducing your AGI immediately — this lowers both your income tax and the 7.5% threshold floor; (2) Growth inside the HSA is completely tax-free — you can invest HSA funds in index funds, ETFs, or mutual funds and never pay taxes on gains; (3) Withdrawals for qualified medical expenses are tax-free at any age, now or in retirement.

To qualify for an HSA in 2026, you must be enrolled in an HDHP with a minimum deductible of $1,650 for self-only coverage or $3,300 for family coverage. You cannot be enrolled in Medicare, claimed as a dependent on another person's return, or covered by a general-purpose FSA.

The advanced strategy: pay current medical expenses out of pocket, let the HSA compound tax-free for decades, then reimburse yourself later. The IRS does not impose a time limit on HSA reimbursements. If you incur a $500 medical expense in 2026, pay it out of pocket, save the receipt, and reimburse yourself from the HSA in 2041 — the HSA funds will have grown substantially in the interim, all tax-free. After age 65, HSA funds can be withdrawn for any purpose without penalty (though non-medical withdrawals are taxed as ordinary income, making it function identically to a traditional IRA).

Medical Mileage: Often Overlooked

The IRS sets the medical mileage rate at 21 cents per mile for 2026 (IRS Notice 2025-XX). This applies to round-trip mileage driven to and from any qualifying medical location — doctor's office, specialist, hospital, pharmacy, physical therapy, dental office, mental health provider, or medical laboratory.

Beyond mileage, you can also deduct:

• Tolls paid while driving to medical appointments
• Parking fees at hospitals and medical offices
• Taxi, Uber, Lyft, or ride-share fares to medical appointments
• Public transit fares (bus, subway, train) to medical care

For annual mileage estimation: two routine doctor visits per year + monthly therapy appointments + quarterly specialist visits + occasional pharmacy trips = approximately 40 trips × 12 miles average = 480 miles × $0.21 = $100.80 in deductible mileage.

For a patient managing a chronic condition — weekly therapy (52 sessions × 8 miles = 416 miles = $87.36) plus monthly specialist and hospital visits (approximately 200 miles = $42.00) = $129.36 in medical mileage alone without counting any other transportation costs. Over a lifetime of managing a serious chronic condition, this adds up meaningfully.

Record keeping requirement: maintain a contemporaneous log of date, destination, purpose, and odometer readings. Apps like MileIQ or a simple spreadsheet suffice. Credit card and bank statements showing pharmacy charges serve as corroborating evidence.

Long-Term Care Insurance Deduction

Premiums paid for a qualified long-term care insurance contract are deductible as medical expenses, subject to age-based annual limits. A "qualified" contract must meet specific IRS requirements including guaranteed renewable coverage, no cash surrender value, and benefits triggered by inability to perform at least two activities of daily living or cognitive impairment.

These amounts are indexed for inflation annually. If you pay more than the age-based limit, only the limit is deductible. Both spouses can each claim their own age-based limit. At the 22% tax bracket, a 65-year-old deducting $4,810 in LTC premiums saves approximately $1,058 in federal income tax — a meaningful offset to what are often substantial premiums.

Bunching Strategy: Maximize Your Medical Deductions

The most effective planning technique for medical deductions is "bunching" — concentrating discretionary medical spending into a single tax year to maximize the amount that clears the 7.5% AGI threshold and simultaneously pushes total itemized deductions above the standard deduction.

Here is how bunching works in practice. Suppose you have $8,000 in planned medical spending spread over two years ($4,000 per year) and your AGI is $70,000 (threshold = $5,250). Neither year clears the threshold on its own. But if you bunch both years' spending into a single year — $8,000 total — you clear the threshold by $2,750 and have a deductible medical expense that contributes to itemizing.

Specific procedures that can often be timed:

• Elective dental work — schedule that crown in December rather than January
• Eye exams and new glasses or contacts — move up to the current year
• Physical therapy — complete planned sessions before year-end
• Elective surgeries with flexible scheduling — LASIK, hernia repair, joint replacement when medically appropriate
• Fertility treatment cycles — work with your clinic on timing

Bunching medical expenses combines powerfully with charitable giving bunching. By using a Donor Advised Fund (see our charitable giving guide) to front-load two or three years of planned charitable giving into a single year, you can create an "on year" where itemized deductions far exceed the standard deduction, followed by an "off year" where you take the standard deduction. This approach extracts maximum value from both the medical and charitable deduction.

The Self-Employed Health Insurance Deduction

If you're self-employed and pay for your own health insurance, you get a special deduction: 100% of premiums are deductible from your AGI — no 7.5% threshold required. This is an "above the line" deduction that reduces your AGI directly, which then lowers the 7.5% threshold for the itemized medical deduction.

International: Canada, UK, Australia

Canada (CRA)

Canada allows a Medical Expense Tax Credit (METC). You can claim medical expenses that exceed the lesser of: 3% of your net income, or $2,759 (2026 threshold). The credit is 15% federally, plus provincial credits. Eligible expenses include prescriptions, dental, vision, and most treatments not covered by provincial health insurance.

UK (HMRC)

The UK doesn't allow deductions for personal medical expenses — the NHS provides universal coverage. However, if medical expenses are directly related to your work (e.g., an eye test required for a screen-based job), some costs may be claimable through employment expenses.

Australia (ATO)

Australia eliminated the net medical expenses tax offset in 2019. However, disability aids, attendant care, and aged care expenses may still qualify under specific provisions. Self-employed Australians can deduct some work-related health costs.

How to Track and Claim Medical Expenses

1. Gather all receipts and EOBs — Insurance Explanation of Benefits statements show what you paid out-of-pocket.
2. Calculate your AGI first — Your AGI is on Line 11 of Form 1040.
3. Apply the 7.5% threshold — AGI × 7.5% = your floor. Only expenses above this count.
4. Check if itemizing makes sense — Add up all potential itemized deductions. If it's more than your standard deduction, itemize.
5. Report on Schedule A, Line 1 — Enter total qualifying expenses on Form 1040, Schedule A.

Medical Expense Deduction Calculator

Quick estimate for a US taxpayer:

1. Find your AGI (Form 1040, Line 11)
2. Multiply by 7.5% → that's your threshold
3. Add up all qualifying medical expenses paid (not reimbursed)
4. Subtract threshold from expenses → that's your potential deduction
5. Multiply by your marginal rate (22–37%) → estimated tax savings

Example: $90,000 AGI · $6,750 threshold · $12,500 total medical · $5,750 deductible · At 24% → $1,380 saved

Frequently Asked Questions